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Capturing Volatility With An Iron Condor On RUT

|Includes: iShares Russell 2000 ETF (IWM)

Summary

RUT 1230/1240C 910/900P expr. 02/19/2016.

46 Day trade that captures 3.5% yield.

Conservative trade because of high Implied Volatility.

2016 is off to an ominous start and this trade generates a modest return with a conservative Iron Condor trade. With Implied Volatility over 20 I was able to sell a 1230/1240 Call at .15 (that's $150 for every $10,000 frozen with broker) and a 910/900 Put at .20 (that's $200 for every $10,000 frozen with broker). What this means is that if RUT doesn't go up 10.77% or down 18.05% in the next 46 days then the 3.50% in premium that I collected up-front will become free and clear. This strategy generates a peristent return in all kinds of markets and performs even better during times of high volatility.

Symbol RUT
Implied Volatility 21.01%
Current Price $1110.44
Analysis Date 01/05/2016
Exp Date 02/19/2016
Days to Exp 46

Trade Info: Strike Price % away from current Delta Value Standard Deviations away

Short Call 1230 10.77% .0291 1.44355146864196

Short Put 910 18.05% .0342 2.42008578433084

Call Condor credit: 0.15

Put Condor Credit: 0.20

Total Credit: 0.35

Total Yield: 3.50%

Note that our short strikes are past their 1st Standard Deviations

Note that our short strikes are past their 1st Standard Deviations

for more information please see IronCondorCapital.com

This article is tagged with: Income Investing Strategy

Additional disclosure: I placed this trade in my account 1/5/2016